[soccermum2005]

I am a legal resident alien whose british father passed away while residing in spain. He had property and cash in spain and a bank account in england. The will divides everything equally between his 4 children. I have to pay inheritance tax in spain, but not in england. Will I have to pay in the US? What about state taxes for PA?

[wnhough]

QUOTE," I have to pay inheritance tax in spain, but not in england. Will I have to pay in the US? "---No federal estate taxes are due for those who die in 2010 regadlress of the worth of the estate.The federal estate tax is repealed for only one year in 2010 and will return to 2001 rates and rules in 2011.( the estate tax is repealed in 2010, but then the act "sunsets" in 2011 and the estate tax reappears with an applicable exclusion amount of only $1,000,000 (unless Congress acts before then).In other words, the IRSdoes not impose a federal estate tax on inheritances received from overseas or a foreign country. Most all states(excpet some states,i.e, Connecticut, Indiana, Iowa etc) also follow this guidance and also do not assess an estate tax on property inherited from overseas.
But, REMEMBER!If you bring the money into the US( into your bank account) via wire transfer from abroad, if the amount of money exceeds $10,000 , then your bank will report the amount to the IRS( US Treaury Dpt).That doesn't mean to pay any form of taxes on the money transferred into the US from overseas.Federal law requires that all banks report any cash deposits made in excess of $10,000 in the hopes of discouraging money laundering, rather than tax evasion. "wires" from abroad require the same information.
Also, you must file IRS Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts,suppose, during the current tax year, you receive ifts or bequests valued at more than $100,000 from abroad and the form is due on the date of the filing your income tax return -- including any extensions of time to file.
You also need to file form TD F 90-22.1;you file the form every year you have more than $10K in overseas accounts
"What about state taxes for PA? "--- Regardless of the tax treaty betwenn US and Spain or UK, you still need topay your CG(either LTCG/STCG) taxes to your state government. You can get a credit on CG taxes that you paidoverseas when disposing of your property abroad over US federal level CG taxes.